Investment firm TPG's Rise Fund will invest USD 200 million
in Airtel Africa's mobile money business, Airtel Mobile Commerce BV, at a
valuation of USD 2.65 billion, Airtel said on Thursday.
With this transaction, Rise Fund is estimated to get 7.5
percent stake in Airtel Mobile Commerce (AMC) BV which is currently the holding
company for several of Airtel Africa's mobile money operations.
''A newly incorporated investment vehicle of The Rise Fund
will invest USD 200 million through a secondary purchase of shares in AMC BV
from Airtel Africa. The transaction will close in two stages,'' the statement
said.
USD 150 million will be invested at the first close, once
the transfer of sufficient mobile money operations and contracts into AMC BV
has been completed, with USD 50 million to be invested at the second close upon
further transfers.
''The proceeds from the transaction will be used to reduce
Group debt and invest in network and sales infrastructure in the respective
operating countries,'' the statement said.
Airtel Africa Group is also in discussions with other
potential investors in relation to possible further minority investments into
Airtel Money, up to a total of 25 percent of the issued share capital of AMC
BV, the statement said.
''The transaction is the latest step in the Group's pursuit
of strategic asset monetization and investment opportunities, and it is the aim
of Airtel Africa to explore the potential listing of the mobile money business
within four years,'' Airtel Africa said.
AMC BV is currently the holding company for several of
Airtel Africa's mobile money operations. It now intends to own and operate the
mobile money businesses across all of Airtel Africa's fourteen operating
countries.
Operating under the Airtel Money brand, Airtel Africa's
mobile money services offer financial services which include mobile wallet
deposit and withdrawals, merchant and commercial payments, benefits transfers,
loans and savings, virtual credit card, and international money transfers.
Mobile money services are available across the Group's 14
countries of operation, however, in Nigeria, the Group offers Airtel Money
services through a partnership with a local bank and has applied for its own
mobile banking license.
The Airtel mobile money service generated revenue of USD 110
million in the third quarter. It registered 41 percent year-on-year growth in
constant currency largely driven by 29 percent growth in customer base to 21.5
million.
The transaction is expected to reach first close over the
next three to four months. From first close The Rise Fund will be entitled to
appoint a director to the board of AMC BV and to certain customary information
and minority protection rights.
''With today's announcement we are pleased to welcome The
Rise Fund as an investor in our mobile money business and as a partner to help
us realize the full potential from the substantial opportunity to bank the
unbanked across Africa,'' Airtel Africa CEO Raghunath Mandava said.
Yemi Lalude, Partner at TPG who leads Africa investing for
The Rise Fund said that financial inclusion is a global issue that is most
acute in Africa.
''We look forward to working with Airtel Africa to enhance
their mobile money services, broaden its use cases, and grow into new markets.
With this investment in Airtel Africa's mobile money operations, we are excited
to expand The Rise Fund's global fintech portfolio and continue to deepen our
focus on improving financial inclusion in Africa and around the world,'' Lalude
said.
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